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Facts
The assessee trust's applications for registration under Section 12A and approval under Section 80G(5) were denied by the CIT(E). The denial was primarily because the application for registration was filed under an incorrect sub-clause of Section 12A(1)(ac). The assessee had provisional registration under Section 12AB and claimed exemption, but filed under sub-clause (vi) instead of sub-clause (iii).
Held
The Tribunal held that the mistake in filing under the incorrect sub-clause was not fatal. Since all facts were available and the assessee was otherwise eligible, the CIT(E) ought to have considered the application under the correct sub-clause. The matter was restored to the CIT(E) for fresh consideration.
Key Issues
Whether the CIT(E) was justified in rejecting the application for registration under Section 12A solely due to filing under an incorrect sub-clause, despite the assessee being otherwise eligible.
Sections Cited
12A, 80G(5), 12AB, 10(23C), 11, 12, 288, 44AB
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SMT. ANNAPURNA GUPTA
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. Nos. 663 & 664/Ahd/2025 (िनधा�रण वष� / Assessment Year : NA) बनाम/ Udan Education CIT(Exemption) Charitable Trust 609, Aaykar Bhavan, Vs. D/99, Vithathalesh Vejalpur, Ahmedabad Bunglows, Nr. Kashidham Society, Laxmipura, Gujarat - 390016 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAATU8398M (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Kunal Rathod, A.R. ��यथ� क� ओर से/Respondent by : Shri Rignesh Das, CIT. DR Date of Hearing 05/06/2025 Date of Pronouncement 19/08/2025 (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM:
These appeals relate to same assessee are against the separate orders of the Ld. Commissioner of Income Tax (Exemption), (hereinafter referred to as “CIT(E)”), Ahmedabad dated 02.12.2024 & 03.12.2024, denying registration under Section 12A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and also the approval u/s.80G(5) of the Act; respectively.
& 664/Ahd/2025 [Udan Education Charitable Trust vs. CIT(E)] - 2 – 2. It was pointed out that initially registration u/s.12A of the Act was denied to the assessee and since for grant of approval u/s.80G(5) of the Act, the existence of registration u/s.12A of the Act was pre-requisite, therefore, approval u/s.80G(5) of the Act was also denied by the Ld. CIT(E).
Considering the above, both the appeals were taken up together for hearing, since the issues involved are inter-related.
Both the appeals are delayed for filing by 29 days. The assessee has filed an application before us supported by duly sworn affidavit of the Trustee of the assessee trust explaining the cause of delay as the Authorized Representative being unwell during the period when order passed by the Ld. CIT(E). The affidavit was supported with the medical reports of the Authorized Representative. Basis the said application, Ld. Counsel for the assessee pleaded that the small delay of 29 days in filing of both the appeals before us be condoned. Ld. DR did not object to the same. In the light of the same, the small delay of 29 days in filing of the present appeals are held to be reasonably explained to us as having occurred on account of the illness of the Authorized Representative of the assessee and are, accordingly condoned. The order was pronounced in the Open Court and appeals were proceeded to be heard with.
We shall be adjudicating the appeal of the assessee relating to rejection of application filed seeking registration u/s.12A in ITA Nos.663/Ahd/2025.
& 664/Ahd/2025 [Udan Education Charitable Trust vs. CIT(E)] - 3 – 6. The argument of the Ld. Counsel for the assessee before us was that the Ld. CIT(E) had rejected the assessee’s application solely for the reason that the facts of the assessee’s case did not justify the sub-clause (vi) of clause (ac) of sub-section (1) of Section 12A of the Act in which the application was filed by the assesee. He pointed out that the assessee had filed the application for grant of registration in Form 10AB under item (B) of sub- clause (vi) of clause (ac) of sub-section (1) of Section 12A of the Act. As per this sub-clause, application for seeking registration could have been made by the assessee in circumstances where the activities of the trust had commenced and no income or part thereof had been excluded from the total income on account of the applicability of Section 10(23C) (iv)(v)(vi) (via) or Section 11 or Section 12 of the Act for any year preceding the date of application. Ld. Counsel for the assessee pointed out that the Ld. CIT(E) noted the assessee to have claimed its income exempt u/s.11 of the Act in A.Ys. 2022-23, 2023-24 & 2024-25 and accordingly held that the assessee was not eligible to get registered u/s. 12A(1)(ac)(vi)-Item (B) of the Act . The assesses application was therefore rejected.
The contention of the Ld. Counsel for the assessee before us was that the assessee had inadvertently filed the application under the incorrect sub-clause. He pointed out that the assessee had been granted provisional registration u/s.12AB of the Act w.e.f. A.Ys. 2022-23 to 2024-25 and had accordingly, claimed its income exempt for the said year, as noted by the Ld. CIT(E) also. That as & 664/Ahd/2025 [Udan Education Charitable Trust vs. CIT(E)] - 4 – per the provisions of Section 12A(1)(ac) of the Act, the assessee was required to have filed an application under sub-clause(iii) thereof but had inadvertently filed the same under sub-clause (vi) Item-(B). He drew our attention to sub-clause (iii) of Section 12A(1)(ac) of the Act pointing out that it provided for application to be filed for registration u/s.12A of the Act where assessee trust was provisionally registered u/s.12AB of the Act, the application being required to be filed at least six month prior to the expiry of the provisional registration or within six months of commencement of its activities, whichever, is earlier, as under:
“Conditions for applicability of sections 11 and 12. 12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— . . . . (ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,— (i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020)], within three months from the first day of April, 2021; (ii) where the trust or institution is registered under section 12AB 87[or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10] and the period of the said registration 87[or approval, as the case may be,] is due to expire, at least six months prior to expiry of the said period; (iii) where the trust or institution has been provisionally registered under section 12AB 87[or provisionally approved under sub-clause & 664/Ahd/2025 [Udan Education Charitable Trust vs. CIT(E)] - 5 – (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10], at least six months prior to expiry of period of the provisional registration 87[or provisional approval, as the case may be,] or within six months of commencement of its activities, whichever is earlier; (iv) where registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11, at least six months prior to the commencement of the assessment year from which the said registration is sought to be made operative; (v) where the trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, within a period of thirty days from the date of the said adoption or modification; 88[(vi) in any other case, where activities of the trust or institution have— (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought; (B) commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities,] and such trust or institution is registered under section 12AB: 89[Provided that where the application is filed beyond the time allowed in sub-clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time;] (b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year,— (i) the books of account and other documents have been kept and maintained in such form and manner and at such place, as may be prescribed; and (ii) the accounts of the trust or institution for that year have been audited by an accountant defined in the Explanation below sub-section (2) of section 288 before the specified date referred to in section 44AB and the person in receipt of the income furnishes by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars, as may be prescribed; & 664/Ahd/2025 [Udan Education Charitable Trust vs. CIT(E)] - 6 – 8. He contended, therefore, that merely on account of wrong mentioning of the sub-clause in which the application had been filed by the assesee to the Ld. CIT(E), he ought not to have rejected the same, but considering that all the facts were there before him of the assessee having been granted provisional registration, the Ld. CIT(E) ought to have considered the application filed under the correct sub-clause to Section 12A(1)(ac) of the Act. He therefore pleaded that the matter be restored back to the Ld. CIT(E) to consider the application filed in the sub-clause which applied to the facts of the case of the assessee.
Ld. DR though vehemently supported the order of the Ld. CIT(E) was unable to controvert the fact pointed out by the Ld. Counsel for the assessee that the assessee otherwise was eligible for grant of registration u/s.12A of the Act though under a different sub-clause as pointed out by the Ld. Counsel for the assessee before us.
We have heard contention of both the parties and we are convinced that the denial of grant of registration by the Ld. CIT(E) in the present case was merely on account of the application filed by the assessee mentioning incorrect sub-clause of Section 12A(1)(ac) of the Act. The Ld. Counsel for the assessee has fairly demonstrated before us that it had been granted provisional registration earlier u/s.12AB of the Act and accordingly, was required to file its application u/s.12A(1)(ac)
& 664/Ahd/2025 [Udan Education Charitable Trust vs. CIT(E)] - 7 – sub-clause (iii) of the Act. Inadvertently, the application had been filed under sub-clause (iv) Item (B) of the said Section. Ld. DR was unable to controvert this contention of the Ld. Counsel for the assessee. This mistake surely is not fatal for the grant of registration. All the facts of the case being available with the Ld. CIT(E), we agree with the Ld. Counsel for the assessee that the Ld. CIT(E) ought to have considered the application filed under the applicable sub-clause of Section 12A(1)(ac) of the Act and proceeded to decide the issue on grant of registration to the assessee u/s.12A of the Act accordingly.
We, therefore, restore the matter back to the Ld. CIT(E) with the direction to consider the application filed by the assessee under the appropriate sub-clause of Section 12A(1)(ac) of the Act and pass order accordingly in accordance with law.
In the result, appeal of the assessee is, therefore, allowed for statistical purposes.
Taking up the assessee’s appeal against the denial of approval u/s.80G(5) of the Act in since, the issue is related and interconnected to the issue of grant of registration u/s.12A of the Act, which is admittedly a necessary pre-requisite for grant of approval u/s.80G(5) of the Act and on account of the denial of which registration, the assessee’s application seeking approval u/s.80G(5) of the Act was denied by the Ld. CIT(E),the application of the assessee seeking approval u/s 80G(5) of the Act,is also restored back to the Ld. CIT(E) to be & 664/Ahd/2025 [Udan Education Charitable Trust vs. CIT(E)] - 8 – considered alongwith the assessee’s application seeking registration u/s.12A of the Act, which has been restored back by us in our order in assessee’s appeal in above.
In the result, appeal of the assessee is allowed for statistical purposes.
In the combined result, both the appeals are allowed for statistical purposes.
This Order pronounced on 19/08/2025
Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 19/08/2025 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. 5. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,